Goods and Services Tax (GST) Council, chaired by Union Finance Minister Nirmala Sitharaman, convened its 56th meeting from Wednesday. As it comes to a close tomorrow, the Indian middle class hopes for a simplified two-slab system and rate cuts across the board ahead of the festival season.
In the Prime Minister’s Independence Day address, Narendra Modi announced the upcoming GST reforms as a “Diwali gift”, but he did not delve into the details.
Later, a Finance Ministry update revealed the possible move to a much simplified two-slab system and other measures. Read about it HERE.
Here are some sectors that could see possible rate cuts:
Entertainment: GST on movie tickets could fall from 12 per cent to 5 per cent.
Automotive: Cars under 1.2L (1200cc, small cars) and sub-350cc motorcycles could see a GST cut from 28 per cent to 12 per cent, or even lower. Electric vehicles above the Rs 20 lakh tag could see a price hike due to the GST rate update.
Hospitality: GST on hotel and resort stays might drop from 12 per cent to 5 per cent.
Pharma: Certain life-saving drugs (like cancer medication) could be exempted from GST, and essential medical supplies could see massive cuts.
Agro: With the Centre’s renewed push on farmer-centric policies, fertilisers could get a lower 5 per cent GST or even be exempt.
Textiles: The current 12 per cent GST could be reduced to 5 per cent to support a sector now marred by Trump tariffs.
Luxury and “sin goods”: Tobacco, tobacco derivatives, and luxury automobiles could be elevated to a new 40 per cent sin tax.
Market experts estimate that the GST reforms could lead to a $21 billion loss in revenue. Traditionally, this hit is lopsided towards states over the Centre, and this could mean non-BJP-ruled states could mount significant resistance unless the union government takes a bigger hit.
